FTB - can this mortgage be beaten please

atruefaker

Hello All

An IFA has got me this deal -

£250,000 mortgage
£75,000 (30% deposit)

Income - £41,600

Mortgage offer is Santander -
+1.99% above the base rate, 2 yr tracker

Product fee is £1,495 (inc. basic valuation and £250 cashback).

As a FTB, I was wondering if this is the best deal as I asked him about HSBC, Co-op, etc and he said 'Oh no point as they are rejecting nearly 80% of applicants'. I thought I was ina good position, so not sure what to do.

Could anyone else advise me please?

Many Thanks

opinions4u

It's a low rate deal, although some would suggest a low fix is a better bet than the low tracker. The fee is high. Take a look at www.moneyfacts.co.uk/mortgages to compare alternatives, but the broker is right to say that HSBC cherry pick.

£250,000 mortgage
£75,000 (30% deposit)

That suggests a £325,000 purchase price. Which makes £75k a 23% deposit. Did you mean a £250k purchase with a £175k mortgage?

(Not being pedantic, trying to value the cost of the fee against the size of the loan properly).

jamesd

It doesn't matter whether they reject 80% of applicants. What matters is whether they reject your application. It appears that you're going for a six times income multiple. That's not the territory where cautious lenders make loans and it'll probably significantly restrict your choice of lenders.

_Andy_

£1500 for a two year deal? Eugh.
Brokers won't recommend HSBC as they only deal with customers directly.

_Andy_

Good point raised about the income - which lender does he think is going to approve 6x?

runninglea

I think the mortgage is only for 175K therefore just over 4 times salary

atruefaker

Sorry my mistake, the loan would be £170000.

The property is worth £250K, and I have an £80K deposit.

Thanks

jamesd

First Direct offer a two year tracker at 2.19% plus BoE with £99 arrangement fee, plus a valuation fee of a few hundred Pounds. Assuming all of the loan was outstanding (no capital repaid) that higher interest rate would cost you £340 a year. The £1,495 fee for the deal you're getting appears to make that deal more expensive than FD. No harm to give FD a call and see what they say.

You'll probably need no late or missed payments to get the FD deal and not much unsecured borrowing.

fraser

get yourself to http://www.moneymadeclear.org.uk/tables/

for all of the products in the market

paddytt

Co-Operative Bank have a 2.49% (+1.99%) tracker for 3 years, 25% deposit, £999 fee. There is an even better deal for Current Account holders (lifetime not 3 years, and no fee)

Does anyone know if you can apply for the Current Account at the same time and do you have to fully "switch" to them?

thanks

TT

sneezyboots

I have just been offered a mortgage from co-op. (Should be exchanging and completing end next week). I did loads of research and didn't find anything about them rejecting loads of people. They did take a little longer than I expected to agree mortgage (6 weeks in total including requesting proof of income etc).